KEY POINTS:
Tourism Holdings' independent directors are unanimously recommending shareholders sell the company to Australian operator MFS Living and Leisure, saying it is the most value-creating option available to them.
The independent adviser's report by Ferrier Hodgson said the Queensland company's $2.80 takeover offer was within a valuation range of
between $2.67 and $3.07 a share.
"The board believes that acceptance of the offer from MPY NZ [MFS Living and Leisure] is the most value-creating option available to shareholders," the directors said.
Chairman Keith Smith said it was a full and fair offer, with no other parties showing any interest in making an alternative bid.
He said shareholders should obtain their own advice "because each shareholder [has] different conditions or different objectives, but we think it's a very fair offer which shareholders should consider."
MFS Living and Leisure Group chief executive Marshall Vann said the appraisal report and directors' recommendation confirmed the offer was compelling for shareholders.
"The price is significantly above brokers' target prices before the announcement and is a very attractive premium."
The offer was a 29 per cent premium on a five-day trading volume-weighted average price before the offer.
Tourism Holdings' share price closed up 2c yesterday at $2.76, having traded at $2.27c before the interest from MFS Living.
ABN Amro Craigs raised its target price from $2.09 to $2.80 after news of the offer, while Forsyth Barr increased its valuation from $2.58 to $3.17, calling it credible but opportunistic.
First NZ Capital analyst Jason Familton said the $2.80 offer was reasonable but not a knockout bid.
"I think there is potential scope for that to increase. I wouldn't have thought people would be jumping in to accept $2.80."
The independent adviser's report has been sent to the Takeovers Panel for review before being sent to shareholders with full details of theoffer.
AXA holds a 12.4 per cent stake in Tourism Holdings, some of which is managed by AllianceBernstein.
AllianceBernstein portfolio manager Andrew Bascand would not comment until the report had been examined.
"I think shareholders should still wait until they get the independent report and have a good read of it and until that happens you're not going to be making any significant decisions, I would think," Bascand said.
The takeover, which values Tourism Holdings at $277 million, was conditional on Overseas Investment Office consent, Australian regulatory approval and 90 per cent acceptance from shareholders.
Tourism holdings takeover ASX-listed MFS Living and Leisure bid $2.80.
* Adviser values shares between $2.67 and $3.07.
* Independent directors recommend acceptance.
* Takeover needs 90 per cent acceptance.
